Order: 2014

- 1 1

- 7

Served: November 7, 2014



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 7 th day of November 20 1 4

Essential Air Service at

ESCANABA, MICHIGAN DOT

- OST

- 2003

- 15128

under 49 U.S.C. 41731 et seq.



### ORDER SELECTING AIR CARRIER

Summary By this Order

, the Department is selecting SkyWest Airlines, operating as Delta Connection (SkyWest), to provide 12 nonstop round trips per week fro m Escanaba, Michigan to Detroit Metropolitan Wayne County Airport (DTW) using 50

- passenger Canadair Regional Jet (CRJ200) aircraft from January 1, 2015, through

December 31

, 201 6 , for an annual subsidy of $3,507,011. 1

Background By Order 2012

- 4

- 10 (April 6, 2012), the Department selected Delta Air Lines, Inc. (Delta) to provide 12 nonstop round trips per week to DTW using CR J200 aircraft for a two year period ending December 31, 2014, for an annual subsidy of $2,833,558.

As the end of the contract w as appro a ching, the Department issued Order 2014

- 6

- 14 (June 24

, 2014) requesting proposals from air carriers interested in providing EAS at

Escanaba for a new contract term. In res ponse to that Order, we received proposals from

Charter Ai r Transport and SkyWest

.

1 Such subsidy is calculated and distributed on a fiscal year basis, subject to the availability of funds.- 2

-

Each carrier’s complete proposal and community comments may be accessed online at www.regulations.gov by entering Docket number DOT

- OST

- 2003

- 15128 in the search

block.

Proposal of Charter Air Transport Charter Air Transport submitted a proposal for a two

- year term to provide 12 nonstop round trips per week to DTW using 30

- pa ssenger Embraer EMB120 aircraft for an annual subsidy of $2,833,558.

Proposal of SkyWest SkyWest submitted a proposal for a tw o

- year term to provide 12 nonstop round trips per week to DTW using CRJ200 aircraft for an annual subsidy of $3,507,011. SkyWest will operate the service as Delta Connection. 2

Community Comments On July 29

, 2014, we reque ste d comments from Escanaba regarding this EAS air carrier

selection case. In response

, we received letters from the City of Escanaba and Delta County Airport supporting the proposal put forth by SkyWest. Both entities state that SkyWest’s proposal “will maintain the consistency and continuity needed to increase the already established fre quent flyer loyalty in our community.” In addition, the City and Airport both mention the superior on

- time performance and customer service provided by SkyWest as further reasons for supporting the airline’s proposal.

Decision After carefully reviewing each air carrier’s proposal and taking into acc ount community feedback, the Department has decided to select SkyWest for a new, two

- year term. We base our decision on the five factors 49 U.S.C. § 41733(c)(1) directs us to consider: 1) service reliability; 2) contractual and marketing arrangements with a larger carrier at the hub; 3) interline agreements with a larger carrier at the hub; 4) community views, giving substantial weight to the views of the elected officials representing the users; 5) whether

th e carrier has included a plan in its proposal to market its service to the community.

First, SkyWest has a proven record of providing reliable EAS at Escanaba, as well as

several EAS communities. Since SkyWest’s service would operate as Delta Connectio n it

will provide passengers access to Delta’s global network. In addition, SkyWest’s service to DTW, a large hub airport and the second largest hub for Delta, will provide customers with seamless connections to the national air transportation system. Fu rthermore, SkyWest has unanimous community support, a key carrier

- selection criterion. While SkyWest did not include in their proposal a plan to market their service, neither did Charter Air Transport. Moreover , Charter Air Transport does not currently h ave the

2 The SkyWest proposal reflects a change from the previous Order in that SkyWest will be responsible for this service, rather than Delta, but will ope rate as Delta Connection, thus providing the community with virtually the same service it has been receiving under the previous contract.- 3

-

requisite authority from the Department of Transportation’s Economic Fitness Division to operate its proposed service. 3

The Department shall make this selection of SkyWest at Escanaba contingent upon the Department ’s receipt of properly executed c ertifications from the air carrier that it is in compliance with the Department’s regulations regarding drug

- free workplaces and nondiscrimination, as well as the regulations concerning lobbying activities

. 4

Carrier Fitness

49 U.S.C. §§ 41737(b) and 41738 require s that the Department find an air carrier fit, willing, and able to provide reliable service before we may subsidize it to provide EAS

. SkyWest is subject to the Department’s continuing fitness requirements, and no

information has come t o our attention that would cause us to question the air carrier’ s fitness at this time. T he Federal Aviation Administration has been contacted , and it has raised no concerns that would negatively affect our fitness findin gs. The Department

therefore conc lude s that SkyWest is reliable and fit to conduct the operations proposed

here.

This Order is issued under authority delegated in 49 CFR Part 1

. 25a(b)

.

ACCORDINGLY,

1. We select SkyWest Airline s to provide Essential Air S ervice at Escanaba, Michigan and

establish the annual subsidy rate s as described in Appendix C ;

2

. The Department direct s SkyWest Airlines to retain all books, records, and other source and summary documentation to support claims for payment, and to preserve and maintain

such docum entation in a manner that readily permits its audit and examination by representatives of the Department. Such documentation shall be retained for seven years

from the service date of this Order or until the Department indicates that the records may

be destroyed, whichever comes first. Copies of flight logs for aircraft sold or disposed of

must be retained. The carrier s may forfeit their compensation for any claim that is not supported under the terms of this Order ;

3 See Order 2011

- 4

- 11 (April 8, 2011) issuing effective commuter authority to Charter Air Transport.

4 The certificati ons are available online under “Reports and Publications” at http://www.dot.gov/policy/aviation

- policy/small

- community

- rural

- air

- service/essen tial

- air

- service- 4

-

3 . We f i nd that SkyWest Airlines is fit, willing and able to operate as a certificated air

carrie r
, and capable of providing reliable Essential Air S ervice at Escanaba, Michigan ;

4

. Th is docket will remain open pending further Department action ; and

5

. The Department will serve a copy of this O rder on the mayor of Escanaba, Michigan ; the airport manager of Delta County Airport ; SkyWest Airlines ; and Charter Air Transport.

B y:

BRANDON M. BELFORD Deputy Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is ava ilable at www.regulations.govAppendix A



## AREA MAP

Maps generated by the Great Circle Mapper

- copyright © Karl L. Swartz

.Appendix B 

### SkyWest Proposal at Escanaba, MichiganAppendix C

SkyWest Airlines

Essential Air Service to be Provided at Escanaba, Michigan

DOT

- OST

- 2003

- 15128

Annual Subsidy: $3,507,011

Contract Term : January 1, 2015

, through December 31, 2016

Scheduled Service : 12 nonstop round trips per week

Hub : Detroit Metropolitan Wayne County Airport (DTW)

Aircraft : CRJ200 Rate per Flight: 1 $2,86 8 Weekly Ceiling: 2 $68,8 32

Note: The carrier understands that it may forfeit its compensation for any flights that it does not operate in conformance with the terms and stipulations of the rate Order, including the service plans outlined in the Order and any other significant elements of the required service, without prior approval. The carrier understands that an aircraft take

- off and landing at its scheduled destination constitutes a completed flight; absent an explanation supporting su bsidy eligibility for a flight that has not been completed, such as certain weather cancellations, only completed flights are considered eligible for subsidy. In addition, if the carrier does not schedule or operate its flights in full conformance with th e Order for a significant period, it may jeopardize its entire subsidy claim for the period in question. If the carrier contemplates any such changes beyond the scope of the Order during the applicable period of this rate, it must first notify the Office of Aviation Analysis in writing and receive written approval from the Department to be ensured of full compensation. Should circumstances warrant, the Department may locate and select a replacement carrier to provide service on these routes. The carrier must complete all flights that can be safely operated; flights that overfly points for lack of traffic will not be compensated. I n determining whether subsidy payment for a deviating flight should be adjusted or disallowed, the Department will consider

th e extent to which the goals of the program are met and the extent of access to the national air transportation system provided to the community.

If the Department unilaterally, either partially or completely, terminates or reduces payments for service or changes service requirements at a specific location provided for under this Order, then, at the end of the period for which the department does make payments in the stipulated service levels, the carrier may cease to provide service to that specific locati on without regards to any requirement for notice of such cessation. Those adjustments in the levels of subsidy and/or service that are mutually agreed to in writing by the Department and carrier do not constitute a total or partial reduction or cessation of payment.

Subsidy contract are subject to, and incorporate by reference, relevant statutes and Department regulations, as they may be amended from time to time. However, any such statutes, regulations, or amendments thereto shall not operate to controv ert the foregoing paragraph.

Funds may not be available for performance under this Order beyond December 11, 2014. The Government’s obligation for performance under this Order beyond December 11, 2014, is subject to the availability of funds from which p ayment for

services can be made. No legal liability on the part of the Government for any payment may arise for performance under this order beyond December 11, 2014, until funds are made available to the Department for performance. If sufficient funds a re not made available for performance beyond December 11, 2014, the Department will provide notice in writing to the carrier.

All claims for payment, including any amended claims, must be submitted within 90 days of the last day of the

month for which com pensation is being claimed. For example, claims for service provided in July must be filed by

October 31; August claims must be submitted by November 30, and so on

.

1 Annual compensation of $3,507,011 divided by 1,223 annual departures (24 weekly departures x 52 weeks x 98 percent completion)

2 24 arrivals and departures per week multiplied by $2,86 8 per flight